Tag Archives: monetary policy

The notion that “easy money” created asset booms is levelled (famously by Austrian school economists such as von Mises and Hayek) against the 1920s boom and by a range of commentators about the Great Moderation boom. In both cases, the Fed (dominated by Benjamin Strong as New York Fed Governor up to 1928 and by Alan Greenspan as Fed Chair 1987-2006) is held to be to […]

Milton Friedman’s 1967 Presidential Address (pdf) is something monetary economists regularly say anyone interested in monetary economics should read. Having recently read it, I have come to the conclusion that it is something anyone interested in monetary economics should read. As is normal with Friedman, it is beautifully clear, one of his great attributes. His analysis […]

There is a joke in modern American politics–the Republicans want a big defence force they don’t want to use anywhere and the Democrats want a small defence force they want to use everywhere. Implicit in the joke is that the Republicans like military spending and the Democrats don’t. Because the right is “strong” on defence […]

Skepticlawyer’s excellent post on the GFC examines the financial crisis. The post below is concerned with the time period for monetary policy. While, as I note below, the collapse in total spending clearly worsened the GFC, this post is more about how to avoid or minimise recessions and, particularly, events such as the Great Recession. […]

One of my basic analytical principles is that things reveal their nature in history (including the history that has not happened yet — that is, what has happened is not the sum of possibilities). If one wishes to understand current events, then cultivate a sense of history for the past is the cause of the […]

A perennial discussion in monetary policy is rules versus discretion. Should the central bank be constrained to follow a policy rule or should it have policy discretion? I find this debate generally muddled both in the means-versus-ends question and what is the proper underlying concern. Is the concern bad policy or unclear policy? With constraining […]

It is a matter of some comment that the public debt burden of the United States has recently increased somewhat. Upward, ever upward And that this surge in debt has come from increased spending A more elevated state More than from falling revenues. Buy now, pay later (The “negative deficits” in Truman’s and Clinton’s second terms meant the US […]

Dr Horwitz’s thoughtful and generous response to my original post is useful in clarifying what a serious Austrian school economist thinks and correcting some of my misapprehensions. It seems to have been a useful exercise, to provide reactions to Austrian commentary from someone much more familiar with mainstream economics. Even better, I now have something I […]

I find Steve Horwitz, along with George Selgin (prominent advocate of free banking and supporter of a productivity norm [pdf] for monetary policy), the most accessible of contemporary Austrian school economists as they are both clear writers who seek to engage with those who are not of their school and are refreshingly free of the nastiness […]

[SL: there was a time, not so long ago, when conservatives and libertarians could afford to be smug about the intellectual miasma in which left-liberals and progressives had lost themselves. It is unfortunate–and does us little credit–that when a decent number of left-liberals reacted in horror to the colonisation of their political tradition by postmodernism […]